U.S. federal debt to exceed GDP for first time since World War II
According to projections from the group, which advocates for lowering the federal debt, the deficit for fiscal 2020 will exceed $3.8 trillion, more than 2.5 times the record set during the Great Recession.
The annual deficit, the amount the government has to borrow to pay its bills, adds to the overall accumulated debt the government must eventually pay off.
Since gross domestic product (GDP) last year was $21.4 trillion and expected to shrink this year, U.S. debt is projected to exceed about $20 trillion, according to the watchdog.
In its January budget outlook, the nonpartisan Congressional Budget Office projected that the nation's accumulated debt, while on a steady upward trajectory, was set to hit 98 percent of GDP within a decade.
It will now surpass that level before the fiscal year ends on Sept. 30, according to CRFB.
While borrowing has been necessary to avert economic catastrophe during the pandemic, CRFB said, the government will require major plans to find a fiscally sustainable path once the crisis ends.
"Like the record levels of borrowing undertaken during World War II, a large share of today's massive deficits are both inevitable and necessary in light of the current pandemic crisis," the group said in its report Monday.
"Combating this public health crisis and preventing the economy from falling into a depression will require a tremendous amount of resources – and if ever there were a time to borrow those resources from the future, it is now," CRFB President Maya MacGuineas added in a statement. ■